Andersen: An Obstruction of Justice?

1. Look up the term corrupt in the dictionary. What is the definition? Was corrupt appropriately applied to the actions of Andersen?

The dictionary defines corrupt as, “having or showing a willingness to act dishonestly in return for money or personal gain”. In the case of Andersen and Enron, the question of corruptness relates to the destruction of documents. While at first appearance it seems like an easy question to answer, many details come into play. The destruction of documents is a normal audit procedure used to protect the firm and company (client). Auditors are instructed to destroy any documents that are not needed. In the case of Andersen, this was a normal and legal policy. In the case of Andersen the destruction of documents all happened at one time, when the chances of a case against Andersen were likely to occur. Is this corrupt? It is hard to say. IN MY OPINION, Andersen was NOT corrupt in their practices. They were following the letters of the law and providing the best services they could for their client. Andersen did not lie about their actions and thus were not dishonest. I do believe that there were “red flags” surrounding Andersen, but without breaking a law they were not corrupt. Ultimately corrupt and acting unethically is not the same thing, and while Andersen may not have been ethical they were not necessarily corrupt. They believed they were following the GAAS principles and providing a fair and thorough audit. That being said would they have done it differently if they could go back in time? Probably.

2. The issues that overturned the Andersen verdict were based on faulty jury instructions, not on whether Andersen was in fact guilty or innocent. Based on the information in this case and the other information you know, do you believe Andersen violated the law?

In the case Andersen